To the Extent That Oligopolies Differentiate Their Products

question 105

Multiple Choice

To the extent that oligopolies differentiate their products,

• A) there is overproduction from society's point of view.
• B) they force themselves into deadlocks that waste resources.
• C) there is the promise of new and exciting products.
• D) they are also likely to price at marginal cost.

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Definitions:

Marginal Cost

The climb in cost associated with generating another unit of a product or service.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the quantity of output produced.

Marginal Cost

The cost of producing one additional unit of a product or service, which can change as the level of production varies.

Average Variable Cost

The total variable costs of production divided by the quantity of output, representing the per-unit variable cost.